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UK Plc is to be hit with over a £1 billion of extra costs because the Government refuses to heed calls to de-link Uniform Business Rates from the Retail Price Index.

Jerry Schurder, head of rating at leading surveyor, Gerald Eve LLP whose clients include 40% of the FTSE 100 said: “With one simple step the Government could achieve much more to aid industry and preserve our high street than it achieved with its VAT reduction. Yet it appears perversely intransigent.”

The UBR is normally linked to the previous September’s RPI yet today’s RPI figure for February has fallen to zero. However Schurder explained that the RPI figure is merely a ceiling and existing legislation permits the government to adopt a lower figure for UBR (although it has never done so).

Schurder said: “Normally, there is not a significant difference between the RPI figure in September and the following March / April when the bills go out but the exceptional current economic circumstances has led to a huge gap between the two.

“The RPI in September 08 was artificially high and it has now fallen to one of the lowest levels on record. This will result in real increases in rates bills of 5% this April, increasing business costs by £1.2bn at a time when occupiers can least afford it.”

The CBI has called on the Chancellor to end the RPI-driven adjustment to the business rates multiplier over the next two years which Schurder says is a very logical approach.

However Alastair Darling has already rebuffed similar calls from leading retail figures saying: “There are no plans to amend this system for 2009-2010”.

Schurder added: “UK Plc already faces just about the highest property tax in the world which makes the Government’s reluctance to help at this time of need particularly galling.”